Monday, June 6, 2011

On Being Shock Doctrined by the Media

While reading Naomi Klein's The Shock Doctrine, it occurs to me that Canada, like many other nations, had become the science lab for Milton Friedman and the Chicago School.

Stephen Harper's strong connections with the Republican neoconservative movement, are not random or isolated. We fit a template, though it didn't take a coup for the final victory.

It was more of a hostile takeover. And it began with the media and the Fraser Institute.

The Fraser was opened by Michael Walker in 1973, in response to an NDP government being elected in British Columbia.
In the fall of 1973, Michael Walker a call from an old college friend, Csaba Hajdu. Hajdu's boss, MacMillan Bloedel's T. Patrick Boyle, and other business executives in B.C. were greatly agitated by the NDP government of Dave Barrett and wanted advice on how to bring about its demise. In the spring, Walker met with Boyle, who twenty-three years later is still a Fraser Institute trustee. While a think-tank was not an ideal way to deal with the immediate problem of getting rid of the NDP government, Boyle and his mining-executive friends were apparently willing to take the long view. Walker's pitch was good enough to persuade fifteen of them to hand over a total of $200,000 to get the project started." It was the seed money for the Fraser Institute. (1)
And from the beginning, the Fraser was helped along by the American neocons:
The Fraser Institute also boasts impressive conservative credentials. The institute's authors include Milton Friedman [Ronald Reagan's economic adviser] and Herbert Grubel, while its editorial board includes Sir Alan Walters, former personal economic adviser to Margaret Thatcher. Finally, William F. Buckley Jr, brother-in-law of BC Socred bagman Austin Taylor, is a favourite guest speaker of the institute. In short, the Fraser Institute is a conservative think-tank heavily funded by the corporate sector. (2)
Conrad Black, the man who gobbled up the Canadian media and turned it into a vehicle for the right, was also an early supporter of the Fraser. He no doubt used his influence to bring many prominent media personalities on board.

Murray Dobbin discusses this in his 2003 book, The Myth of the Corporate Citizen:
... as the Fraser Institute's annual reports highlight, there is a cosy relationship between prominent Canadian journalists and the Fraser. The Financial Post co-sponsors the institute's Economy in Government prize, which has rewarded such ideas as creating publicly funded private schools. Diane Francis, editor of the Financial Post, is pictured in an annual report photo addressing a Fraser Institute fundraising luncheon. Financial Post editor-at-large Neville Nankivell and Globe and Mail columnist "Terry" Corcoran are shown "sharing a joke" and "taking part in a discussion" with staff at the institute's offices.

The Fraser Institute seems to have a particularly cosy relationship with CTV news. In 1994, chief anchor and senior news editor Lloyd Robertson lent his support to the institute by serving as guest speaker at one of its fundraising luncheons. Mike Duffy, host of CTV's public-affairs program Sunday Edition, also helped the institute fundraise by being a guest speaker in 1995.(3)
Mike Duffy is now a senator, a reward for his complicity in the 2008 election victory of Harper. He didn't bring in Conservative voters, but his machinations, resulted in many Liberal voters choosing to stay home.

CTV's Pamela Wallin is also a Harper appointed senator, and Canwest Global's Peter Kent, a Harper cabinet minister.

The use of the media to promote a neoconservative/neoliberal agenda is not new, though I was surprised to learn that it had been used in Chile, before the coup, by the Edwards Family publishing empire, and their newspaper El Mercurio.

The Chicago School had first become interested in Latin America, when it was being influenced by Raul Prebisch, and his developmentalist theories.

They opened a branch of their school in Chile, hoping to churn out disciples who could turn the region into a hotbed for their own theories, but it didn't work. The people were simply not ready to take a sharp right turn.

But when Savadore Allende, a known Marxist, was elected President, they went into panic mode, first attacking him in the press, who for ...
.... three years [carried] on an energetic campaign against the elected government, sustained by a subsidy of $1.5 million from the government of the United States. The principal shareholders of El Mercurio were the Edwards family, the descendants of early 19th century immigrants from Britain who had founded a banking empire, the Banco de A. Edwards, and further increased their wealth as the salesmen of a popular brand of American carbonated drinks. (4)
And when that didn't work, they launched their coup, and who became the first economy minister under the planted dictator Augustus Pinochet? Fernando Leniz, president of the El Mercurio newspaper.

What happened next is an almost carbon copy of what has been happening across the free world when the neocons gain control.
Leniz and his associates pushed through an immediate programme to favour richer Chileans by cutting taxes and public spending, a strategy which undid much of the progress which the Allende government had achieved in making Chile into a fairer society with opportunity for all. Leniz abolished taxes on wealth and capital gains tax, giving the wealthy a chance further to enrich themselves and widening the already enormous gulf between rich and poor in Chile. At the same time the privatisation of much of the economy provided golden opportunities for those who were able to take part in that process, notably, as we shall see, the Pinochet family itself.

Allende's price controls, which had kept basic items within the reach of poorer people, were abolished by the dictatorship at a stroke. Trade union activity was hampered where it was not totally outlawed, and stripped increasingly vulnerable workers of protection.

Land reforms pursued by Allende were reversed and land returned to its former owners, causing rural workers to suffer. The free daily ration of milk which Allende had set up for children was abolished, and health services and the state school system deteriorated. Unemployment, which in the Allende years had been around 4 per cent of the workforce, touched 14.5 per cent by 1975. In the same year the gross national product dropped by 12.9 per cent and the average Chilean grew 20 per cent poorer ... (4)
And just as Margaret Thatcher's reforms were devastating for Britain, and Ronald Reagan created the most homeless people in American history, Chile witnessed a new phenomenon: The birth of the soup kitchen.
In the mid-1970s Pinochet's policies produced a striking image for the times, the soup kitchen. These informal food banks filled a great need for poor Chileans. It was common in the poor neighbourhoods that surrounded many cities to see long queues of people lining up for dollops of food among their leaking wooden shacks and unmade roads.

In 1975 Milton Friedman visited Chile in the company of another right-wing economist, Arnold Harberger. Both proclaimed themselves satisfied with the state of the Chilean economy. Meanwhile, the bankers who had so cannily smelt good times coming in September 1973 made hay. In her study for the Economist Intelligence Unit in 1987, Stephany Griffith-Jones, the eminent Chilean economist, pointed to how the bankers were making enormous profits on their loans. In the second half of 1975 they paid depositors 19 per cent a year in real terms while they charged borrowers on average 115 per cent for loans, a margin of 96 per cent. (4)
The Edwards Family newspapers helped to reap enormous profits for the Edwards Family banks.

It's no wonder Friedman was so elated.

He should have tried the "soup".


1. The Myth of the Good Corporate Citizen: Canada and Democracy in the Age of Globalization, By Murray Dobbin, James Lorimer & Company, 2003, ISBN: 1-55028-785-0, Pg. 188

2. Of Passionate Intensity: Right-Wing Populism and the Reform Party of Canada, By Trevor Harrison, University of Toronto Press, 1995. ISBN: 0-8020-7204-6, Pg. 48-49

3. Dobbin, 2003, Pg. 209

4. Pinochet: The Politics of Torture, By Hugo "'Shaughnessy, New York University Press, 2000, ISBN: 0-8147-6201-8, Pg. 137-139

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